Commentary: American rules is indeed “America rules”

In this world, some people only see what they want to see, and some only stress what they want to stress. They even use their power to force others to accept their point of views.

The US labels China with “unfair trade”, “intellectual property theft” and other tags, and is trying to make hype through media reports. However, what the US fans up is not true.

In the white paper “The Facts and China’s Position on China-US Trade Friction” released on Sept. 24, China has revealed the US misunderstandings .

The US singles out the imbalance of trade in goods, and blames China for the imbalance. It doesn’t see that the imbalance has evolved over time, and even turned a blind eye to the fact that the US ran a surplus in its trade with China from the 1980s to early 1990s.

Nor did the US pay attention to its defects in economic structure, which can be manifested by the facts that the US was running trade deficits with 102 countries by 2017, and China’s trade deficit with the US mainly lies in capital- and technology-intensive products.

Moreover, 59% of China’s trade surplus with the US was contributed by foreign-invested enterprises in China in 2017, and China has, to a large extent, taken over the trade surpluses of Japan, the Republic of Korea (ROK) and other East Asian economies with the US. Yet haunted by the cold-war mentality, the US imposes strict export controls on China, thereby limiting the potential of advantageous US exports.

It complains that the “unequal” openness of markets has led to “unfair” trade, but turns a blind eye to the fact that the so-called “fair trade” is based on “America first”, or the protection of America’s own interests. Even if we follow this absolute reciprocity logic of the US, unfair and non-reciprocal practices are more than common in the US.

For example, China’s tariffs on peanuts in the shell, dairy products and trucks are 15%, 12% and 15-25% respectively, while World Trade Organization (WTO) tariff figures show those of the US to be 163.8%, 16% and 25%, all higher than China.

The US unjustly labels the technology transfer in the course of cooperation between China and developed countries as forced technology transfer, failing to see that establishment of partnerships with Chinese companies is a voluntary behavior initiated by the enterprises of developed countries keen to maximize their interests.

In addition, the US side ignores that over the years, American firms in China have earned handsome profits through technology transfer and licensing. They are the largest beneficiary of technological cooperation.

Since 2000, the total research and development (R&D) spend in China has registered an average annual growth rate of close to 20%. In 2017, China spent 1.76 trillion yuan in R&D, second only to the US.

China’s huge efforts and achievements with regard to intellectual property rights protection are also totally ignored by the US whoturns a deaf ear to the fact that more intellectual property cases, especially patent cases, are tried in China than in any other country and the adjudication period for foreign-related intellectual property cases in China is among the shortest in the world.

China paid $7.96 billion in licensing fees to the US in 2016. China’s payment of licensing fees and royalties for the use of foreign technology has recorded a four-fold increase over the last decade, reaching $28.6 billion in 2017 and ranking fourth in the world.

Besides, the Chinese government’s encouragement to Chinese business to go global is distorted by the US as a government attempt to acquire advanced technologies through commercial merger and acquisition. However, from 2005 to 2017, only 17 out of 232 direct investments from China involved high technology, while others were mainly in real-estate, finance and services.

Washington’s attack on China’s subsidy policy shows its ignorance to the fact that subsidies are widely used by many countries and regions, including the US itself. Certainly, the US also shuts its eyes to China’s conscientious compliance with WTO rules and its efforts to press ahead with reform to ensure the compliance of domestic policies.

Is US slow on it, or selectively blind? When faced with problems, the US doesn’t reflect on itself. Instead, it simply attributes the trade problems to China, because the latter is its largest source of trade deficit.

What the US has told the world through its ignorance is that the American rules actually are self-centered and unreasonable.